The Importance of Reskilling for New Technology and How to Do it Effectively

In the current dynamic business environment, reskilling and upskilling have emerged as pivotal topics in HR discussions, particularly with the proliferation of new technology. Reskilling involves identifying employees in positions experiencing declining demand and providing them with training for new roles with growing demand, while upskilling refers to enhancing the performance of employees in their current roles. As new technologies such as generative AI continue to emerge, the necessity for upskilling and, more significantly, reskilling becomes evident.

According to data obtained from over 1,100 organizations, the median proportion of an organization’s learning budget allocated to reskilling for new technologies is 25%, with some organizations allocating up to 40% of their budget for this purpose. Importantly, it should be noted that allocating the highest amount to reskilling does not necessarily guarantee success, but rather the effectiveness of the investment in the broader context of human capital management.

Determining the appropriateness of reskilling for your organization entails considering factors such as industry benchmarks, the impact of new technologies specific to your industry, and the composition of your workforce. This tailored approach is essential for maximizing the benefits of reskilling initiatives.

When implemented effectively, reskilling can yield substantial benefits for both employees and organizations. It fosters job security for employees, reduces the likelihood of employee turnover, and enhances overall engagement and retention. However, reskilling may not be the optimal strategy for every organization. Factors to consider include the availability of internal talent, employees’ willingness to undergo reskilling, time constraints, and the cost-effectiveness of external skill acquisition.

Two critical success factors for effective reskilling are the establishment of a comprehensive infrastructure and organizational agility. A comprehensive approach to reskilling integrates human capital management practices with skill development, career paths, and retention strategies. Furthermore, agility is crucial for keeping pace with evolving business environments and emerging technologies.

In summary, reskilling plays a pivotal role in preparing employees and organizations for the demands of new technologies. While it offers numerous benefits, it is essential to carefully assess whether it is the suitable strategy for your organization. Aligning reskilling with broader talent management practices and maintaining up-to-date resources are key to ensuring that reskilling efforts are responsive to the evolving needs of the business.

The data presented in this content was accurate at the time of publication. For the most current data, please visit www.apqc.org.